MARKET WRAP: Sensex up 95 pts; PSBs rally; Bajaj Auto up 1% post Q2 results

Sectorally, Nifty Auto and PSU Bank indices ended the day as top gainers, up between 1.3 to 1.8 per cent.

11:51 AM

Aavas Financiers, HDFC AMC: Stocks that doubled your money in Samvat 2075

Consider this. Among the top 10 gainers in the S&P BSE500 index, five companies are from the financial sector. This comes at a time when the sentiment was impacted by the liquidity situation triggered by crisis in companies like IL&FS, Dewan Housing Finance Limited (DHFL). Yet fundamentally sound companies delivered. READ MORE HERE

11:32 AM

Market check

11:17 AM

Jubilant FoodWorks rallies 12% in two days on better-than-expected Q2 nos

The company, the master franchisee of Domino’s Pizza and Dunkin’ Donuts in India, reported a better-than-expected 12 per cent year on year (YoY) growth in net sales at Rs 988 crore in Q2FY20. Analysts on an average expected net sales at Rs 964 crore for the quarter.

 

Net profit, however, declined 2.2 per cent YoY during the quarter at Rs 76 crore due to one-time expense on account of provisioning for investments made by Jubilant FoodWorks Employee Provident Fund Trust in corporate bonds of stressed firms such as Dewan Housing Finance Corporation (DHFL), Reliance Capital & IL&FS. READ MORE

11:00 AM

Infosys bounces back 6% from day's low on heavy volumes

Shares of Infosys slipped 4 per cent to Rs 615, but recovered later, on the BSE on Wednesday as sentiment continued to remain subdued due to window-dressing allegations by whistleblower groups.

 

At 10:30 am, the stock was trading 1.3 per cent higher at Rs 651 per share. In comparison, the S&P BSE Sensex was ruling 0.42 per cent higher. The stock bounced back 6 per cent from day's lows and touched an intra-day high of Rs 655.35 apiece. Trading volumes more than doubled on the counter in the intra-day deals. READ MORE

10:53 AM

Samvat 2076 will be an opportunity for investors to find hidden gems

Whenever we go back in history to identify defining moments, we normally tend to ignore the immediate consequences of such events and focus only on the long-term impact of the same. However, when you are in the midst of the aftermath, you are bound to get overwhelmed and affected. In addition to demonetisation and the impact of good and services tax (GST), the recent defining moment was the fall of the infallible IL&FS and the resulting trust deficit that engulfed the financial markets, leading to disastrous consequences. READ MORE

10:38 AM

CEAT trades lower post Q2 nos

10:22 AM

RBL Bank tanks 20%, hits life-time low as net profit dips 74% in Q2

Shares of RBL Bank tanked 20 per cent to Rs 231, its fresh life-time, low on the BSE on Wednesday after the private sector bank posted its worst quarterly show for the July-September quarter (Q2FY20) since listing on August 31, 2016. The stock fell below its previous low of Rs 242 touched on October 15. The stock was trading close to its issue price of Rs 225 per share. READ MORE

10:06 AM

IDBI Capital on Axis Bank

Management has proactively highlighted stress in some specific sectors which possess risk of slipping into NPLs over the next few quarters. Thus, conservatively we have raised our slippage expectation for FY20 along with keeping out loan growth moderate for FY20.

Post near-term stress taking shape, we expect the book to normalize and improve thereon. Domestic credit growth across segments continues to see a revival along with decent traction in retail term deposits. Hence we structurally remain positive on the bank to garner its incremental book, improvement in margins and bring down its credit cost near to its long-period average (110-115bps) by end-FY21

10:05 AM

Diwali Picks :: Motilal Oswal Securities

Large-caps: ICICI Bank, SBI, HDFC, Bharti Airtel, L&T, HUL, Titan.

 

Mid-caps: Indian Hotels, MMFS, Ashok Leyland, ABFRL, JK Cement, Colgate, Petronet LNG, PI Industries.

 

Contra Ideas: Coal India, Motherson Sumi, Page Industries, LIC Housing Finance, Birla Corp.

10:04 AM

ICICI Securities on HDFC Bank

Given the general economic slowdown, near term pressure is evident. However, considering the focus on balance sheet growth maintaining superior asset quality, the bank is well poised to deliver consistently with margin leadership & robust return ratios. The bank remains a portfolio stock with premium valuations. Accordingly, we maintain our BUY rating with a revised target price of Rs 1440 valuing bank at ~24x FY21E EPS (3.9x FY21E ABV) and include | 75 per share for HDB Financial Services.

10:03 AM

Geojit on RBL Bank

Despite registering a strong performance in the current quarter, the company expects NPA to elevate over the next two to three quarters. This would increase credit cost by 35–40bps. Hence, we value the bank at P/BV of 2.1x for FY21E and revise our rating to HOLD with an updated target price of Rs 494

10:02 AM

IIFL on ICICI Lombard General

Changing regulations, improving competitive dynamics and a conservative strategy (which prefers profitability over growth by avoiding businesses such as crop) provide strong earnings visibility, in our view. Hence, we forecast GDPI/EPS Cagr of 11%/35% over FY19-21ii. We expect ~740bps improvement in RoE, to 28.7% by FY21ii (7.6x P/B). Reiterate BUY.

10:02 AM

IIFL on HDFC Bank

HDFC Bank’s headline performance in 2QFY20 was strong, with healthy loan growth, sharp increase in core fee income, moderation in cost/income ratio and contained loan loss provisions driving a 2.2% beat to IIFLe at the PBT level. Management commentary on asset quality was also positive.

On the other hand, the rapid growth in term deposits and extra liquidity is exerting pressure on NIM, the core fee income growth looks too sharp to sustain and core cost/income ratio (ex-trading gains, dividend, and recoveries) has been flat on a QoQ/YoY basis. Given the current operating environment, we would rate the performance above-average. Maintain BUY.

10:01 AM

CLSA on RIL

Driven by a lower standalone tax rate and higher retail profits, we raise EPS estimates 3-4%. Aligning Jio’s multiple to an increase in CLSA’s target multiple for Bharti (9x from 8.5x Ev/Ebitda) and rollover to Sep-20 takes our target to Rs1,710 from Rs1,530. Management guided on petcoke gasification achieving full utilisation by early 2020.

Fibre InvIT stake sale, Aramco deal closure, IMO gains, launch of a New Commerce model in retail and subs ramp-up in fixed-line business are other 12-month triggers even as Jio’s subs growth remains strong and deleveraging continues. BUY.

10:00 AM

Jefferies on telecom sector

Jio announced bundled packs with outgoing mins. The flagship 444 plan offers 2GB/day for 84 days and 1,000 offnet mins and should drive upgrades from the current 1.5GB/day 399 plan as it is better value than IUC vouchers, though the ARPU uplift would be lower (11%). Whether this endures, unlike the IUC vouchers, which won’t, will depend on customer upgrade behavior. For now, this precludes us from a constructive sector view. Stay with underperform rating on Airtel, Idea and RIL